At our recent GIODN event, we welcomed Jonathan Pugh, Dr. Karmela Palma Samson, and Izda Ramos, who are experienced OD Practitioners in researching and implementing Environmental, Social, and Governance (ESG) strategies. This insightful session, “New Role for OD: Shaping and Sustaining Environmental, Social, and Governance (ESG) Implementations,” shed light on the evolving expectations of OD professionals in the ESG landscape and offered practical insights for the future of our field.
Let’s Define ESG’s
ESG stands for Environmental, Social, and Governance. Three key areas used to evaluate a company’s ethical impact, sustainability practices, and organizational behavior. ESG is increasingly used by investors, regulators, and stakeholders to assess how responsibly a company operates beyond financial performance.
E – Environmental
Focuses on how a company interacts with the natural world. This includes:
- Carbon emissions and climate change mitigation
- Energy efficiency and renewable energy use
- Waste management and pollution control
- Water conservation
- Biodiversity protection
Example: A company reducing its carbon footprint by switching to solar power.
S – Social
Evaluates how a company manages relationships with employees, customers, and communities. This includes:
- Diversity, equity, and inclusion (DEI)
- Employee well-being and mental health
- Labor standards and human rights
- Customer satisfaction and safety
- Community engagement and philanthropy
Example: A company offering paid parental leave and conducting unconscious bias training.
G – Governance
Assesses the company’s leadership, internal controls, and accountability. This includes:
- Board composition and diversity
- Executive compensation transparency
- Anti-corruption policies and ethical practices
- Shareholder rights
- Data protection and cybersecurity
Example: A company ensures its board has independent directors and clearly discloses executive pay.
Why ESG Matters
- Investors use ESG metrics to manage risk and identify long-term value.
- Employees prefer working for companies that reflect their values.
- Customers are more loyal to brands committed to sustainability and social impact.
- Regulators are increasing ESG reporting requirements globally.
The Role of OD in ESG
Organizational Development professionals can:
- Align ESG goals with company culture and strategy
- Facilitate behavior change and employee engagement
- Implement DEI, well-being, and sustainability initiatives
- Build leadership commitment to ethical governance
ESG is not just about compliance; it’s about building resilient, responsible, and future-ready organizations.
ESG as a Business Imperative
Jonathan opened with compelling data from a 2022 ESG survey:
- 89% of investors now expect ESG reporting
- 74% are likely to divest based on ESG performance
These findings underscore ESG’s growing importance not just for compliance, but as a driver of business success. Jonathan described two perspectives: one that views ESG through the lens of values and societal benefit, and another that frames ESG as a risk mitigation strategy tied to financial outcomes.
Through the example of Walgreens’ Red Nose campaign raising over $321 million since 2015, he illustrated how corporate social responsibility (CSR) can build trust and engagement both internally and externally.
OD’s Alignment with ESG Goals
There are six key intersections between ESG and OD:
- Attracting values-aligned investors and leaders
- Boosting financial performance
- Enhancing employer brand and customer loyalty
- Supporting corporate strategy
- Embedding purpose in organizational culture
- Enhancing workforce engagement
OD professionals need to be embedded in ESG strategy and implementation, acting as integrators across the organization.
ESG Metrics and Organizational Well-Being
Diving into the “S” pillar of ESG, here’s a framework of 6 core and 9 expanded metrics, including:
- Diversity and inclusion
- Pay equity
- Employee well-being
- Flexible work environments
Randstad data reveals low global engagement and highlights employee expectations for well-being and flexibility following the COVID-19 pandemic. The Burson Institute’s 7 elements and 25 dimensions model was highlighted as a tool for OD professionals to enhance both employee experience and organizational performance.
OD’s Strategic Role in ESG
Recent research on OD’s role in ESG in Qatari private organizations, uncovering:
- OD’s potential is underutilized
- ESG initiatives often stem from compliance, not purpose
- OD professionals lack agency in ESG design
These findings call for OD to step into a more empowered role, helping to align ESG with strategy, values, and purpose.
Best Practices and Forward-Looking Trends
The session featured contributions from Izda, who emphasized succession planning, leadership development, and alignment with organizational values. Together, Jonathan and the participants explored:
- How ESG reports can embed OD strategy
- Pushback on DEI efforts and the need to reframe them
- Resources like the UN’s SDGs and the Corporate Finance Institute’s ESG certification
Final Thoughts
This session highlighted that ESG is no longer a side initiative; it is now a strategic imperative. OD practitioners must evolve in tandem with ESG, becoming navigators of purpose, culture, and transformation. The final thought shared to inspire OD professionals to continue sharing their knowledge with organizational leaders on how to support them with strategic initiatives, such as implementing ESG, is that this is OD’s “earthshot moment” a chance to reassert our relevance and shape the future of organizations and society alike.
Let’s continue to lead with insight, integrity, and impact! For more information regarding ESG Pillars- New Role for OD: Shaping and Sustaining Environmental, Social, and Governance (ESG) Implementation. Please contact us at info@instituteod.com
GIODN Editorial Team
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